Zachary Sadeghian Agent and Trustee Of, KAMY Real Property Trust, KAMY Trust, Reram Inc., Kozamesa Inc., Kamy Investments LLC., Amy J. Sadeghian of KAMY Real Property Trust, ZFN Realty LLC v. Denton Central Appraisal District ( 2024 )

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-23-00364-CV
___________________________
ZACHARY SADEGHIAN, AGENT AND TRUSTEE OF KAMY REAL
PROPERTY TRUST, KAMY TRUST, RERAM INC., KOZAMESA INC., KAMY
INVESTMENTS LLC, AMY J. SADEGHIAN OF KAMY REAL PROPERTY
TRUST, AND ZFN REALTY LLC, Appellants
V.
DENTON CENTRAL APPRAISAL DISTRICT, Appellee
On Appeal from the 431st District Court
Denton County, Texas
Trial Court No. 22-9874-431
Before Sudderth, C.J.; Kerr and Womack, JJ.
Memorandum Opinion by Justice Womack
MEMORANDUM OPINION
I. INTRODUCTION
This appeal arises from a property tax appraisal dispute. Appellants Zachary
Sadeghian, Agent and Trustee of KAMY Real Property Trust, KAMY Trust, Reram
Inc., Kozamesa Inc., KAMY Investments LLC, Amy J. Sadeghian of KAMY Real
Property Trust, and ZFN Realty LLC, appeal from the trial court’s order granting
Appellee Denton Central Appraisal District’s (DCAD) motion for summary judgment
on its affirmative defense of limitations. In a single issue, Appellants complain that
the trial court erred by granting DCAD summary judgment because a fact issue exists
regarding whether they had exercised diligence in effectuating service after limitations
had run.1 We affirm.
II. BACKGROUND
Appellants, who own many properties in Denton County, brought this lawsuit
under Chapter 42 of the Texas Tax Code to appeal orders issued by the Denton
1
Appellants describe their sole issue presented as “[w]hether, on the extant
record, the trial court erred by granting the Motion for Summary Judgement [sic] filed
by the District, dismissing Appellants[’] 2022 appraisal challenge for want of
jurisdiction.” But, as DCAD points out, the trial court did not dismiss Appellants’
case for want of jurisdiction; rather, it granted DCAD’s motion for summary
judgment based on its affirmative defense of limitations. See Dall. Indep. Sch. Dist. v.
Barfield, No. 05-01-01897-CV, 2002 WL 1788014 at *4 (Tex. App.—Dallas Aug. 5,
2002, no pet.) (not designated for publication) (“[T]he proper vehicle for raising the
affirmative defense of limitations is a motion for summary judgment, not a plea to the
jurisdiction.” (citing Univ. of Houston v. Elthon, 9 S.W.3d 351, 356–57 (Tex. App.—
Houston [14th Dist.] 1999, no pet.))).
2
County Appraisal Review Board (ARB) regarding Appellants’ protests to the
appraised property tax values for certain properties. Appellants received notice of the
ARB’s orders on September 20, 2022, and filed their petition for review on
November 14, 2022—seven days before limitations expired.2 See Tex. Tax Code Ann.
§ 42.21(a) (providing that a party must file a petition for review of an ARB order
“within 60 days after the party received notice that a final order has been entered”).
Although Appellants timely filed their lawsuit, they failed to request the issuance of
citation until May 8, 2023, and DCAD was not served with process until May 9,
2023—176 days after Appellants filed suit.
DCAD timely filed an answer in which it asserted limitations as an affirmative
defense. Subsequently, DCAD filed a motion for summary judgment based on its
limitations defense. Following a hearing, the trial court granted DCAD’s summary
judgment motion. This appeal followed.
III. DISCUSSION
In their sole issue, Appellants argue that the trial court erred by granting
DCAD’s summary judgment motion because DCAD did not conclusively establish its
2
Because the sixtieth day following September 20, 2022, was a Saturday, the
limitations period expired on Monday, November 21, 2022. See Tex. Civ. Prac. &
Rem. Code Ann. § 16.072 (extending limitations “to include the next day that the
county offices are open for business” when last day falls on a Saturday, Sunday, or
holiday).
3
limitations defense as a matter of law. Specifically, Appellants assert that a fact issue
exists regarding whether they used due diligence in serving DCAD. We disagree.
A. Standard of Review
We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light
most favorable to the nonmovant, crediting evidence favorable to the nonmovant if
reasonable jurors could, and disregarding evidence contrary to the nonmovant unless
reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and resolve
any doubts in the nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex.
2008). A defendant is entitled to summary judgment on an affirmative defense if the
defendant conclusively proves all elements of that defense. Frost Nat’l Bank v.
Fernandez, 315 S.W.3d 494, 508–09 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c). To
accomplish this, the defendant must present summary judgment evidence that
conclusively establishes each element of the affirmative defense. See Chau v. Riddle,
254 S.W.3d 453, 455 (Tex. 2008).
B. Applicable Law
A statute of limitations establishes a time limit for suing in a civil case, Goetsch v.
Rolls, No. 02-20-00263-CV, 2021 WL 733090, at *4 (Tex. App.—Fort Worth Feb. 25,
2021, pet. denied) (mem. op.) (citing Statute of Limitations, Black’s Law Dictionary
(11th ed. 2019)), and operates as an affirmative defense to a cause of action, Dunmore
4
v. Chi. Title Ins. Co., 400 S.W.3d 635, 640 (Tex. App.—Dallas 2013, no pet.). Filing a
lawsuit does not stop the limitations period from running “unless the plaintiff
exercises due diligence in the issuance and service of citation.” Proulx v. Wells,
235 S.W.3d 213, 215 (Tex. 2007). The date of service will relate back to the filing date
only “[i]f service is diligently effected after limitations has expired.” Id.In the summary judgment context, there are shifting burdens on the question
of whether a plaintiff exercised due diligence in effecting service. A defendant meets
its initial burden to establish a limitations defense by showing that service occurred
after the limitations period expired. Flanigan v. Nekkalapu, 613 S.W.3d 361, 364 (Tex.
App.—Fort Worth 2020, no pet.). With this showing in place, “the burden shifts to
the plaintiff to explain the delay and to raise a fact question regarding diligence of
service.” Id. (citing Butler v. Skegrud, No. 02-14-00168-CV, 2015 WL 4148474, at *2
(Tex. App.—Fort Worth July 9, 2015, no pet.) (mem. op.)). This burden includes the
need to “explain ‘every lapse in effort or period of delay.’” Id. (quoting Proulx,
235 S.W.3d at 216). Should the plaintiff raise a fact question on the issue of diligence,
“the burden shifts back to the defendant to conclusively show why the explanation is
insufficient.” Id. at 365.
The standard to assess diligence is whether “the plaintiff acted as an ordinarily
prudent person would have acted under the same or similar circumstances and was
diligent up until the time the defendant was served.” Proulx, 235 S.W.3d at 216; see also
Flanigan, 613 S.W.3d at 365 (“The plaintiff must show continuous diligence from the
5
filing of the suit up until the date that the defendant is served.”). “Generally, the
question of the plaintiff’s diligence in effecting service is one of fact[] and is
determined by examining the time it took to secure citation, service, or both, and the
type of effort or lack of effort the plaintiff expended in procuring service.” Proulx,
235 S.W.3d at 216. But “the plaintiff’s explanation of its service efforts may
demonstrate a lack of due diligence as a matter of law, as when one or more lapses
between service efforts are unexplained or patently unreasonable.” Id.; see also
Lethbridge v. Stout, No. 14-15-01034-CV, 2017 WL 924522, at *2 (Tex. App.—Houston
[14th Dist.] Mar. 7, 2017, no pet.) (mem. op.) (“Texas courts have consistently held
that due diligence is lacking as a matter of law when there are unexplained lapses of
time between filing suit, issuance of citation, and service.” (citing Sharp v. Kroger Tex.,
L.P., 500 S.W.3d 117, 120 (Tex. App.—Houston [14th Dist.] 2016, no pet.))).
Further, because “[a]n excuse of diligence must involve diligence to seek service of
process,” Weaver v. E-Z Mart Stores, Inc., 942 S.W.2d 167, 169 (Tex. App.—Texarkana
1997, no writ), a plaintiff’s explanation may demonstrate a lack of diligence as a matter
of law when it merely attempts to explain why the plaintiff did nothing instead of
describing the efforts it undertook to effect service, see Slagle v. Prickett, 345 S.W.3d
693, 698 (Tex. App.—El Paso 2011, no pet.) (“[W]hen a defendant complains of lack
of due diligence in service of process, the plaintiff must explain what steps he took to
obtain service, not explain why he did nothing.”).
6
C. Analysis
Here, although Appellants timely filed their lawsuit, it is undisputed that service
did not occur until more than five months after the limitations period had expired.
Thus, to avoid summary judgment Appellants were required to show that they had
exercised diligence in serving DCAD by explaining “every lapse in effort or period of
delay” in effectuating service. Flanigan, 613 S.W.3d at 364. Because they failed to do
so,3 the trial court properly granted DCAD summary judgment on its limitations
defense. See id. at 365–67.
3
Appellants, citing at least one case in which a court determined that a plaintiff
did not lack diligence as a matter of law despite taking even longer to effect service
than Appellants did here, seem to argue that the mere fact that they waited 176 days
to serve DCAD is not alone sufficient to show that they lacked diligence as a matter
of law. See English v. Record, No. 01-20-00608-CV, 2021 WL 4095253, at *3–5 (Tex.
App.—Houston [1st Dist.] Sept. 9, 2021, no pet.) (mem. op.) (holding fact issue
existed regarding plaintiff’s diligence despite 238-day gap between filing of petition
and service of defendant). While this argument is correct as far as it goes, it misses
the point. When—as here—a plaintiff serves a defendant after limitations has
expired, it bears the burden to show that it was unceasingly diligent in attempting to
effect service. Flanigan, 613 S.W.3d at 364. Any unexplained or patently unreasonable
lapse—even a relatively short one—is sufficient to show that the plaintiff lacked
diligence as a matter of law. See Proulx, 235 S.W.3d at 216; see also Budget Rent A Car
Sys., LLC v. Valadez, 558 S.W.3d 304, 308 (Tex. App.—Houston [14th Dist.] 2018, no
pet.) (concluding that 32-day unexplained delay established lack of diligence as a
matter of law); Rodriguez v. Tinsman & Houser, Inc., 13 S.W.3d 47, 51 (Tex. App.—San
Antonio 1999, pet. denied) (holding that the plaintiff failed to raise a fact issue on
diligence because the proffered excuse for the 25-day delay between the expiration of
limitations and service was not valid). Thus, the relevant issue is not the length of the
delay per se but whether the plaintiff was diligent in attempting to effect service
throughout the delay—regardless of its length.
7
The only explanation that Appellants offered for their delay in serving DCAD
was that their “properties became part of legally binding arbitration” under Tax Code
Section 41A.015, which Appellants had purportedly requested just prior to filing their
lawsuit. Appellants believed that they could not serve DCAD until the arbitration
process was completed. But, as DCAD points out, this belief was incorrect.
Section 41A.015’s purpose is to allow a property owner to pursue arbitration to
compel the ARB to comply with certain procedural rules. See Tex. Tax Code Ann.
§ 41A.015(a). For example, a property owner may invoke this limited arbitration
procedure to compel an ARB to schedule a hearing on a protest; to deliver
information to the property owner in the manner required by the Tax Code; or to
allow the property owner to offer evidence, examine or cross-examine witnesses, and
present arguments at an ARB hearing. See id. § 41A.015(a)(2)–(4). Section 41A.015’s
limited arbitration procedure has nothing to do with the merits of a protest; rather, a
protest’s merits are determined by an ARB order that a property owner can then
appeal to the district court under Chapter 42 of the Tax Code—as Appellants did
here. See id. §§ 42.01(a), 42.23(a). Because a district court’s review of an ARB order
under Chapter 42 is by trial de novo, a Chapter 42 appeal cures any procedural errors
from the ARB proceeding, effectively rendering any pending arbitration under
Section 41A.015—which is solely concerned with procedural issues—moot. See
Appraisal Rev. Bd. of Harris Cnty. Appraisal Dist. v. Spencer Square Ltd., 252 S.W.3d 842,
845 (Tex. App.—Houston [14th Dist.] 2008, no pet.) (recognizing the general rule
8
that “a trial de novo cures all procedural errors from the proceedings below” and that
this “general rule . . . is applicable to review of appraisal review board orders”).
Further, Section 41A.015 expressly provides that “[a]n award under this section does
not affect [a] property owner’s right to” pursue a Chapter 42 appeal or any other legal
or statutory remedies available to it. Tex. Tax Code Ann. § 41A.015(n). Thus, it does
not appear—and Appellants have not shown—that a pending Section 41A.015
arbitration prevents or excuses a property owner from effecting service in a
Chapter 42 appeal involving the same property.4
Appellants cite no authority for this proposition, stating only,
4
In the[] code[,] “Arbitrators are required by law to dismiss all L[imited]
B[inding] A[rbitration] requests they determine do not meet the
requirements of the law. In the event that a case is dismissed, other than
when there are delinquent taxes on the property, the arbitrator may
charge up to the total allowable fee and the property owner may not
receive a refund of their deposit. LBA requests are required to be
dismissed for the following reasons: Litigation was filed before the LBA
request was submitted that involves the same issues for the same
properties in the same tax year as addressed in the LBA request.”
As DCAD notes, “the[] code” presumably means the Tax Code, but Appellants do
not explicitly state which code they are referring to or cite a specific statute. In any
event, the quoted language, which does not appear anywhere in Section 41A.015, does
not even address service of process.
Having failed to properly cite any authority supporting their contention that a
pending Section 41A.015 arbitration prevented or excused them from serving
DCAD—a contention that is central to their appellate argument—Appellants have
arguably forfeited their sole issue. See Tex. R. App. P. 38.1(i) (providing that an
appellant’s brief “must contain a clear and concise argument for the contentions
made, with appropriate citations to authorities and to the record” (emphasis added)); Huey v.
Huey, 200 S.W.3d 851, 854 (Tex. App.—Dallas 2006, no pet.) (admonishing that the
9
Indeed, even if Appellants could show that their properties’ involvement in a
pending Section 41A.015 arbitration proceeding would have excused them from
serving DCAD, their summary judgment evidence failed to demonstrate that they had
properly invoked Section 41A.015’s limited arbitration process in the first place.
Before a property owner may file a request for limited arbitration under
Section 41A.015, it must “deliver[] written notice to the chairman of the [ARB], the
chief appraiser, and the taxpayer liaison officer for the applicable appraisal district by
certified mail . . . of the procedural requirement with which the property owner alleges
the [ARB] or chief appraiser failed to comply” within five business days after the
alleged procedural violations occurred. Tex. Tax Code Ann. § 41A.015(b)(1). But the
certified mail receipt attached to Appellants’ summary judgment response only
showed that the notice was sent to DCAD, and although the letter itself shows no
addressees, the salutation is to the “Chief Appraiser of the Central Appraisal District
and the ARB Chairman or [DCAD’s] ARB personnel”; it does not mention the
taxpayer liaison officer. Moreover, Appellants’ notice is dated September 13, 2022,
“[f]ailure to cite applicable authority or provide substantive analysis waives an issue on
appeal”); see also Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284 (Tex.
1994) (observing that error may be waived by inadequate briefing). Despite this lack
of authority, we will address the merits of this appeal. See Eco Planet, LLC v. ANT
Trading, No. 05-19-00239-CV, 2020 WL 6707561, at *5 (Tex. App.—Dallas Nov. 16,
2020, pet. denied) (mem. op.) (Osborne, J., concurring) (“Appellate courts have the
discretion to waive issues for inadequate briefing.” (first citing Fredonia State Bank,
881 S.W.2d at 284; and then citing Horton v. Stovall, 591 S.W.3d 567, 569–70 (Tex.
2019))); cf. Perry v. Cohen, 272 S.W.3d 585, 587 (Tex. 2008) (“[A]ppellate courts should
reach the merits of an appeal whenever reasonably possible.”).
10
but the relevant ARB hearings were held on July 12 and August 25, 2022. Thus, any
alleged procedural violations would have occurred more than five business days
before Appellants sent the notice.
Further, Appellants’ proffered excuse does not show that they were diligent in
seeking service of process; rather, it merely attempts to explain why they did nothing.
See Slagle, 345 S.W.3d at 698. Thus, it is insufficient to raise a fact issue concerning
diligence. See id.; see also Allen v. Smith Cnty. Appraisal Dist., No. 12-15-00029-CV,
2015 WL 5157509, at *3 (Tex. App.—Tyler Sept. 2, 2015, no pet.) (mem. op.)
(holding that property owner had failed to raise a fact issue concerning diligence
because her explanation for not timely serving the appraisal district did not show
diligence in attempting to effectuate service but instead explained why she had done
nothing); Rodriguez, 13 S.W.3d at 51 (holding plaintiff’s explanation that her failure to
effectuate service resulted from a miscommunication between her lawyers was invalid
because it “d[id] not involve diligence in attempting to effectuate service” but rather
was offered as an excuse as to why service had not been attempted).
Because Appellants’ proffered excuse for failing to timely serve DCAD (1) is
not valid and (2) does not involve diligence in attempting to effectuate service, they
have failed to raise a fact issue regarding diligence. See Allen, 2015 WL 5157509, at *3;
see also Jarell v. Brookshire Grocery Co., No. 12-02-00096-CV, 2002 WL 1933229, at *2
(Tex. App.—Tyler Aug. 21, 2002, pet. denied) (not designated for publication)
(“Because [a]ppellant’s proffered excuse does not involve diligence in attempting to
11
effectuate service, and her explanation is not valid, it fails to raise a fact issue on
diligence.”). Thus, DCAD established its limitations defense as a matter of law,5 see
Proulx, 235 S.W.3d at 216, and the trial court did not err by granting summary
judgment, see Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 532 (Tex. 1997).
We overrule Appellants’ sole issue.
IV. CONCLUSION
Having overruled Appellants’ sole issue, we affirm the trial court’s judgment.
/s/ Dana Womack
Dana Womack
Justice
Delivered: March 28, 2024
5
In their brief, Appellants, echoing an argument raised in their summary
judgment response, assert that DCAD’s summary judgment evidence was inadequate
because it was “not . . . authenticated” and was “not on file with the court.” But at
the summary judgment hearing, Appellants acknowledged that because the relevant
facts were undisputed, “it [was] irrelevant whether [the trial court] sustain[ed] or
overrule[d]” their evidentiary objections and stated that they “didn’t intend to proceed
with [their] objections.” Thus, the trial court never ruled on them. Having failed to
obtain a ruling on their evidentiary objections, Appellants failed to preserve them for
appellate review. See Tex. R. App. P. 33.1(a); Haase v. Abraham, Watkins, Nichols,
Sorrels, Agosto & Friend, L.L.P., 499 S.W.3d 169, 176 (Tex. App.—Houston [14th
Dist.] 2016, pet. denied) (“Generally, a party forfeits an objection when the
party . . . fails to obtain a ruling on any objection to summary-judgment evidence.”
(citing Dolcefino v. Randolph, 19 S.W.3d 906, 925–26 (Tex. App.—Houston [14th Dist.]
2000, pet. denied))).
12